Impact Podcast | What does disruption really demand of leaders?

JULIAN BIRKINSHAW:
Hello and welcome to Dialogue with the Dean, the flagship series on the Ivey impact podcast. I'm Julian Birkinshaw, Dean of the Ivey Business School, and in this series I speak with Ivey's leading faculty about the research shaping business and society today. 

JULIAN BIRKINSHAW:
My guest today may be new to Ivey, but he spent three decades shaping strategy at the highest level. He's advised global organizations, authored four acclaimed books, and written more than 100 articles that have influenced management thinking worldwide. Now he's bringing that expertise to our students here at Ivey. It's my great pleasure to welcome Michael Raynor in our conversations.

JULIAN BIRKINSHAW:
We’ll explore how strategy can address two of today's most urgent issues; greenhouse gases and artificial intelligence. We'll look at how a strategist frames those challenges and what businesses can do to drive meaningful progress. Michael, welcome to Dialogue with Dean. It's great to have you here.

MICHAEL RAYNOR:
Thanks. Nice to be here, Julian.

JULIAN BIRKINSHAW:
Great. So, we are going to get into the meaty stuff soon but just tell us what brought you back to Ivey. Because, of course, you are, a graduate of Ivey.

MICHAEL RAYNOR:
Yeah, MBA 19… 

JULIAN BIRKINSHAW:
A while back, right? You’re a similar age to me, turns out. 

MICHAEL RAYNOR:
Yeah, similar vintage. I started in January of 25, teaching a fourth year elective. And when I when I introduced myself to the students, I said, well, I got my, doctorate, my union card to teach at HBS back in 2000. 

JULIAN BIRKINSHAW:
HBS is Harvard Business School.

MICHAEL RAYNOR:
It is, Yes. For those for those not in the know. And, I thought, well, before I actually start teaching, I should go and get a little dirt under my fingernails. So, I did a brief 25-year internship and now I'm ready to get started. So, I spend most of that all of that time, actually, in different bits and pieces of the of the Deloitte global firm.

JULIAN BIRKINSHAW:
So, thanks for that. You are best known for the work you did with the late Clayton Christensen. He's one of those management gurus that even non-management thinkers actually know a little bit about. 

MICHAEL RAYNOR:
Absolutely.

JULIAN BIRKINSHAW:
And the concept of disruptive innovation was central to the work that you did with him. Just remind our listeners what is disruptive innovation and why was the concept that became so important and so talked about? 

MICHAEL RAYNOR:
Yeah, we do the whole conversation on the exegesis of disruptive innovation, but we won't. I think it was launched with his first book in 97, The Innovator's Dilemma. Which was hugely successful in part. Nothing wrong with being a little lucky. Great book, to be sure, but it hit the shelves literally back then, in 97, just as the.com boom was getting started and then it became kind of a recipe for getting rich quick. Everybody wanted to know what the internet was going to disrupt. And then Innovator's Solution was, was the follow up in 2003. And I think it did a very good job of answering the puzzle that motivated Clay all those years, which is how is it that great companies come to fail?
And that, I think, really fired people's imaginations. How do you do everything right and end up with the wrong answer?

JULIAN BIRKINSHAW:
And so there were cases, famous cases, the Kodaks of this world, where those companies weren't sort of led by ideas. They were led by people who made at the time, what seemed to be sensible choices that ultimately led them down the wrong route. I often explain this concept to my students is it's not that they didn't listen to their customers, it's listeners that they listened to carefully, to the high end customers, perhaps the wrong customers, and they missed the opportunities that were kind of emerging under their feet, as it were. I mean, that's a simplistic way of saying, but that's.

MICHAEL RAYNOR:
I think that's largely right. I mean, the argument is in order for organizations to stay alive have to sell stuff to customers are willing to pay for it. And so, you build an organization that is designed to do that very well. And to your point, unfortunately, you can't do everything.
And so there are opportunities that sprout up outside the scope of what it is you're paying attention to. And sometimes those alternative solutions end up being better at doing what you do than you are. And by the time you realize it, too late. 

JULIAN BIRKINSHAW:
So, in fact, one of the companies that I'm sure you involved with as well, but Clay Christensen was involved with Intel. And he gave Intel the company a great advice, and they did very well for many years. Now, Intel has fallen on hard times. Did they fall victim to the innovators themselves? 

MICHAEL RAYNOR:
Yeah, Interesting problem. Clay never took credit for what Intel was able to do. The story he tells is that he gave them a set of tools on how to think, and so the very specific example was Intel's ability to create the Celeron low end processor, which then sort of helped them stave off the collapse of the treadmill of constantly trying to create ever faster chips.
So that was the particular trajectory. 

JULIAN BIRKINSHAW:
And then, of course, they somehow missed mobile and they missed whatever NVIDIA does. Any sense of where they went wrong there? I mean, obviously Andy Grove was the chief exec when they did all these wonderful things. Maybe it was bad leadership. Maybe it was a different set of challenges.

MICHAEL RAYNOR:
No, I mean, I haven't been a student of Intel for a while, but I think the interesting thing to keep in mind is that Clay answers a very specific problem, which is how did great companies fail? Lots of crappy companies fail, too, and so they necessarily have been victim of disruptive innovation. 

JULIAN BIRKINSHAW:
Fair enough. I want to move on to just sustainability in a second,
but if people need to know one thing about disruptive innovation, what's your advice to them? In other words, they're looking for example at generative AI right now. Is generative AI going to disrupt my business? I mean what's your simplistic kind of advice to them in terms of how they think about answering that question?

MICHAEL RAYNOR
So, the first thing I'd observe is that as powerful as disruptive innovation theory is, it's not a theory of everything. There are other ways to innovate. And so, AI or any other breakthrough technology could upend your particular apple cart in a number of different ways. A disruptive attack is one of them. So, somebody could sort of blindside you come up from the bottom. That's a disruptive attack. So, you should be looking over your shoulder behind your back. But other attacks could be much more visible, and unfortunately equally difficult to parry. So, you want to look for things that are coming down from the top, right. Very, very sophisticated solutions in very rarefied air that suddenly find a way to get cheap and cheerful. That’s a problem. And then there are things that just show up and it's a better mousetrap, all at once. So, unfortunately, I wouldn't suggest we all be on the lookout for disruption. You should. Unfortunately, your head better be on a swivel.

JULIAN BIRKINSHAW:
Okay. We're going to talk about greenhouse gas emissions, which you've apparently said is the only problem that matters, that really matters right now. I know you published a thing in our own Ivey Business Journal back in November, December last year. The title was “Net Zero is Dead. Long Live Nets Zero”. 

MICHAEL RAYNOR:
My how clever. 

JULIAN BIRKINSHAW:
Indeed. So, give us the synopsis. Give us the sort of the one minute summary of what your argument in that was, and then we'll unpack it a bit. 

MICHAEL RAYNOR:
Yeah. So, I guess the I'll start with your first observation. So, when I say, the only problem that matters, I'm taking a triage view of things, which is that if we don't figure out the GHG problem, we will have a global ecological collapse that basically renders everything else irrelevant.
So, in the same way that if the patient is bleeding out on the sidewalk, you're not worried about their cholesterol. There are lots of other things to worry about. Me personally, I put that at the top of the list. 

JULIAN BIRKINSHAW:
Yeah, and I think a lot of people would agree with you, and of course, it's pretty dire. I mean, the greenhouse gas emissions are going up, Global warming is happening, and we're getting to a point I’m told where it could get critical. 

MICHAEL RAYNOR:
Well, the way I come to look at it is that if you look at the mass extinctions across the history of life on this planet, those that have been caused by carbon emissions that were driven by both the volume and the rate of carbon emissions. If you look at the rate at which we are changing atmospheric GHG concentrations, we're doing it about 100 times faster than what drove the Permian extinction 253 million years ago. The Permian wiped out 96% of life on the planet. So, we are changing things 100 times faster than that. If that doesn't scare you, you're not paying attention.

JULIAN BIRKINSHAW:
Yeah. And I think I would say the majority of people certainly read up on this stuff, get that argument and are worry. But as we know, there's a lot of people who don't read this stuff and a lot of people who are just absolutely ignoring. But let's focus on your argument because you're making a very specific argument in terms of what we can do differently because, current approaches are not actually solving the problem, right. What's your idea? 

MICHAEL RAYNOR:
I think it starts with the observation that the problem is really hidden in plain sight. So, if you look at the sources of industrial greenhouse gas emissions, I'm going to put deforestation and land use change off to one side. Very big problem, by the way. But what I have to say actually doesn't address that problem directly. So, I'm looking at the other 90% of industrial emissions. So, of that, 90% of those emissions come from about 40 or 50 commodities. So, it's steel, glass, cement, synthetic dyes, plastics. It's not it's not a long list. They generate 90 plus percent of all the emissions. They're only about 15% of GDP. So, all the money is over here and all the carbon is over here. 

JULIAN BIRKINSHAW:
The money, meaning all the professional services.

MICHAEL RAYNOR:
All the GDP, everything else education, finance, retail, all the rest of it. Right? Everything else that is the economy. Right. So all the money's over there and all the carbon is over there. And that is Kipling put it, never the twain shall meet. And so you've got this incredibly complex global supply chain that separates one from the other. And so you've got law firms and consulting firms that say, “yeah, I'll throw a few bucks at decarbonization”. Well, how? They only do business with other law firms and other consulting firms and other banks. 

JULIAN BIRKINSHAW:
So, it's actually quite easy if you I mean, we need to unpack, back skip one and two and three. Just remind our listeners because this becomes germane to the conversation. 

MICHAEL RAYNOR: 
Yeah. So, carbon accounting has been, a form of carbon accounting has been, created to try and give people a sense of their ultimate responsibility. For carbon. Right. So scope one is the carbon that you burn. That's the stuff that you actually do. So, you know, it would be, the hot water boilers, if you run a fleet of cars, it would be the gas you burning the cars. It's the carbon that's generated by activity that you have direct control over. Scope two gets its own category, and that's the emissions associated with the generation of, in general terms, purchase power. But for practical terms, it just means electricity. And then scope three is all the carbon that's emitted, throughout your entire supply chain to generate all the things you buy. So, we have a mug here. This mug is a ceramic mug, and all kinds of things had to happen. There had to be earth that was mined and compressed and refined. It had to be molded and fired and shipped and packaged and all of that stuff burned carbon. And so there's embodied carbon here, and that's Ivey's scope three.

JULIAN BIRKINSHAW:
And of course, arriving we've made our commitment to net zero in scope one and two emissions by 2034. And it turns out that that's relatively straightforward. 

MICHAEL RAYNOR:
Oh, it's dead easy here. 

JULIAN BIRKINSHAW:
And any Microsoft or Citibank or whatever can make that same commitment relatively easily. But the elephant in the room you're saying is scoop 3. Which our scope three of course is scope one and two for somebody else. 

MICHAEL RAYNOR:
That's somebody else is, you know, Rio Tinto. And so you might say, “well I'm going to manage my scope three by going to the folks who sell me this mug” and saying, “can you reduce the carbon in the mug?” And they'll look at you and say, “no”, because it's six layers up, a supply chain that terminates somewhere in West Australia.

JULIAN BIRKINSHAW:
So, the fact that large numbers of professional services and sort of tertiary sort of parts of the economy are hitting scope one, two emissions net zero, isn't actually solving the problem. 

MICHAEL RAYNOR:
No. The collective scope one emissions of the 85% of the GDP that I mentioned, it's about 4% of total emissions. There's just no point. 

JULIAN BIRKINSHAW:
So, it’s not that we shouldn't do that, but it's just not making a difference.

MICHAEL RAYNOR:
Well, you should probably do those things because you'll find it saves you money. I mean, going to things like industrial heat pumps, this technology is improving dramatically. I mean, most folks have put up rooftop solar and put in heat pumps. You get on the other side of that you're in a better place. You know, a lot of people are discovering you buy an electric vehicle, you get on the other side of that transition. Your life is just better. It's cheaper to run, cheaper to maintain, last longer, easier to drive, more fun. Like, what's not to like? The problem is, when it comes to things like digging rocks out of the ground, different problem. And we have no established mechanism and it's BS. Everybody's gotten the memo, we have this problem due to a market failure. So, to try and rely on market mechanisms to fix the very market that's failed, 

JULIAN BIRKINSHAW:
So, just be clear what the market failures we haven't put the appropriate value on the externalities, the external costs of digging stuff out of the ground.

MICHAEL RAYNOR:
Well, yeah, of treating the atmosphere like a free sewer. Right. 

JULIAN BIRKINSHAW:
And if we actually priced that properly, and have been pricing it properly, an awful lot of stuff coming out of the ground would have been way more expensive and we would have come up with better solutions. 

MICHAEL RAYNOR:
I find that a compelling argument. 

JULIAN BIRKINSHAW:
Yes indeed. So, what do we do? I mean, it's very clear to me that that basic analysis is right. And I think most people would, would probably get that. Is there a way forward? I mean, I do realize that you look at electric vehicles and you look at solar and wind power as genuinely innovative ways forward, which are getting to some of the some of the root causes. You're saying that that's just we're not making enough progress in those areas. 

MICHAEL RAYNOR:
Well, in those areas you're making, I mean, time is nature's way of preventing everything from happening at once, right? So, it takes a while for these things to change, these very large, complex systems. But there's reason for some optimism in those transitions. The market based workaround is the only thing I've come across that has any hope of having some kind of an impact on what are called environmental attribute credits.

JULIAN BIRKINSHAW:
OK, you’re going to have to explain what those are.

MICHAEL RAYNOR
So, these are essentially ways that companies can leap over the entire supply chain that lies between them and the upstream original sources of what becomes their scope three. So, you have scope one emissions with mining activities. And those scope one emissions just get handed off to everybody that uses the produced products and the refined output of those intermediate steps, but they don't add a lot of emissions. The emissions happen here. And so, what can happen is that, and we'll stick with law firms. A law firm could say, you know what, I want to I want to do something, make it make a difference. There are ways, and that's a whole different rabbit hole, but there are credible ways to say, hey, look, you did $1 million in legal services that involved $15,000 of nickel, and somebody will look at, you know what? Well, if you're really interested, drop me a line, I'll explain it to you. But, you can do that in a credible way. And then so what they what this law firm could do is say, fine, I'm going to find somebody who's exploring very low carbon mining technologies. Company out of Oakville called Novamera has got, surgical mining that obviates a lot of the materials handling associated with mining, which is so they don't have dump trucks hauling waste rock around. It's like a 90 plus percent carbon reduction. So, if Novamera said, “look, I'll sell you the environmental attributes of my nickel mining”. And so then you could pay for that, it would allow them to scale up. And so essentially the model there because no Novamera is very small, you know, like but wait, I got a big problem. Well, that's true, but nothing big starts big. The idea here is to, if you will, put the Tesla of hard rock mining into business. So you find a solution that is radically decarbonized that solves the problem not just with a new widget, but with the fundamental system redesign around how that has created. You support them, they take off, then the market looks at it and goes, oh, I get it. And then all of a sudden Tesla, when it was selling 20,000 cars a year, has $1 trillion market cap.

JULIAN BIRKINSHAW
So I like it. It's an elegant sort of solution. Solution’s too strong a word, but, way of making progress. How much traction are you getting? Or are those involved in the creation of these easy environment attribute credits getting.
MICHAEL RAYNOR:
Depressingly little. 

JULIAN BIRKINSHAW:
Okay. Is this because it's just a new idea that that hasn't. 

MICHAEL RAYNOR:
I hope so. I mean, the pushback that we've gotten on the, I mean, on the supply side, that is to say, finding companies who want to sell these credits, not surprisingly, that's difficult, but that's not as hard, right?
Because they see the source of revenue that they desperately need. Especially you look in the US with the rollbacks on the IRA and the removal of all of the subsidies, hundreds of millions of dollars that were subsidies for things like low carbon cement that have all disappeared. So, we need some way to replace that. So, on the sell side, terrific.
On the buy side, folks look at it and go, “but wait a minute. I don't actually buy nickel”. And so it's a tough sell in that regard. And then they're worried about the standard setters. So, science based targets international. And the rest of them who say look, these are the rules for what counts. And they've moved slowly, but they are moving. And they have said that they will recognize EACs as a scope three certificate. No time to waste.

JULIAN BIRKINSHAW:
I mean as with all these collective action problems, I mean, you do need to try to get lots of different players to line up behind these things. And as you touched on what's happening in the US right now does not make it any easier than Canada can make progress. But ultimately where, if any small country survives. 

MICHAEL RAYNOR:
Yeah. Well, my hope is that it, I mean, again, nothing big start's big, but they put Tesla into business with a couple hundred million dollars. You don't have to show up with 500 billion to get started. The solutions have to be, in my view, broad scope. But small scale. Right? So, system level, when people hear system level redesign, they think, “oh my God.” They roll their eyes back. that doesn't mean big. 

JULIAN BIRKINSHAW:
So given everything we've just discussed, for a business that wants to actually make a difference to address climate change, I mean, it could be Ivey business school, it could be you speaking to me. What should we be doing? 

MICHAEL RAYNOR:
I think it's a it's a two track policy. In the first instance, unfortunately, some hard things really just take money. So, there's an investment to be made. I think investing via mechanisms such as I've described, these environmental attribute credits, as they begin to evolve, you could push for them to be accepted and deployed more widely. That's something that I think really has the opportunity to make a real difference. It is a, as Archimedes would have put it, it is a long enough lever to actually move the world. But you have to you have to do it. The other track are the much more salient, visible things that that people tend to care about. And I think by and large, we tend to over rotate on those and think those are the answer. At the same time, those are worth doing. But one does them, in my view, not from a place of hope, but from a place of courage. Right? Because if you do them from a place of hope, you're thinking, I'm going to do this because I think it's going to work. It's not going to work. 

JULIAN BIRKINSHAW
It's just not enough.

MICHAEL RAYNOR:
But that doesn't mean you don't do it. You do them from a place of courage because they are the right thing to do. And that's different.

JULIAN BIRKINSHAW:
Look, I want to move on to our third topic, AI and innovation in a second, but just before we move on, how do you teach this stuff to our students? Because you're teaching a whole course from corporations and society to our bright young HBAs, MBAs, MScs. What are you teaching them?

MICHAEL RAYNOR:
Well, not surprisingly, I picked up the one set of golf clubs I think I've got some control over, namely the innovation toolkit. And so, my instance of corporation society is called, in the somewhat on brand label, the decarbonization dilemma. So, we're looking at companies that are trying to break the carbon trade off. Right now, we have zero carbon solutions for everything. They're just too expensive. So, we have a cost carbon trade off that we have to break. I look at innovation as the art and science of breaking trade-offs. And so how can we look at this? It's one thing for me to stamp my feet and say, “we've got to go decarbonize everything all at once.” “Okay, so smart guy, what are you going to take a step to actually do?” And so, the cases that I've developed, developing a case on new flier Industries, company based in Winnipeg, they for a bunch of years have made diesel busses for transit authorities all over the world. You know what they're making now? Battery busses for transit authorities all over the world. But that's not easy. To just flip the switch and “I know, I'll make battery busses” easier said than done. So the case looks at the challenges they face as they navigate different transit agencies with different willingness to pay, different appetites for transition. We’re tackling that and that's a very on the ground, real immediate opportunity that can make a real contribution. I mean, if you look at, the city of Toronto, 80% of its scope one footprint is the diesel it burns in it’s transit busses. They're determined to eliminate that. And in fact, another case I'm doing is with the TTC on how they wrestle with that transition. So how do you actually make it work? So we're looking at a few of those.

JULIAN BIRKINSHAW: 
That’s terrific. One of the ways we influence the world is absolutely through the teaching that we do for the next generation of business leaders. So, let's talk about artificial intelligence and innovation. I mean, there's so many angles we could take here, but let's just start with a company that you actually been involved with called Canary Medical.
Most people will not have heard of Canary Medical. 

MICHAEL RAYNOR:
No, they won't. 

JULIAN BIRKINSHAW:
Tell us what it does and why that's an interesting angle on artificial intelligence. 

MICHAEL RAYNOR:
Yeah, so, Canary Medical, I'm co-founder with Bill Hunter. Folks who are students of the Canadian business landscape may recognize that name. He was the founder and CEO for a long time of NGO Tech Pharmaceuticals. They were the folks behind the drug coated stent in 2014. It’s a cliche, but it's true. Back of a napkin and an email, Bill approached me to get involved with, with Canary. The insight there was that technology was allowing, the creation of sensors that were small enough and powerful enough that you could actually put them inside implanted devices. So people get prosthetic knees, for example, a knee prosthesis. And one of the big things, that limits the, return to function of patients of knee replacement surgery is simply post-operative monitoring, which is very difficult to do. And so putting a sensor inside that knee prosthesis gives you very reliable, very accurate data on, knee function and patient activity. You might think, why not just wear a Fitbit? And you'd be right. In fact, the matter is, people don't wear Fitbits And there's a huge selection bias. The people who wear them regularly are the people who care about their fitness and they don't need the help. 

JULIAN BIRKINSHAW:
So, if you put these sensors in, it provides a wealth of data on the movement of the joints. But of course, that that predates artificial intelligence, to be sure.

MICHAEL RAYNOR:
But that's just a source of data,

JULIAN BIRKINSHAW:
Just a source of data. And so let's talk about how we can use AI to make use of that data. 

MICHAEL RAYNOR:
Absolutely. So, it starts out very low level, right? It starts as are you walking or you're not walking. Guess what? Walking is better than not walking. So, we can kind of pick those things up. But where it starts to get fascinating is that there's long been a view that walking was the sixth vital sign. And so with the right kinds of first machine down machine learning in general, artificial intelligence in particular, it gets to the point where you are arguably able to do things like pick up early onset Parkinson's. And that's a really big deal, because right now, when you treat Parkinson's, you give, patients, you know, doses of dopamine. Clinicians are forced to make these assessments based on walking, watching people walk in their office. But if I had high resolution data on how they're walking over time, you could actually start to really calibrate, just like you would say, somebody's insulin if they have diabetes. now all of a sudden, based on blood sugar readings, now I can start calibrating dopamine to treat your Parkinson's based on how you walk. That's a big deal.

JULIAN BIRKINSHAW:
And you're saying AI is, of course, helping us to do that because it has access to massive volumes of data. 

MICHAEL RAYNOR:
Well, massive volumes of our data. But the other thing is that we're able to find those correlations with the secondary correlates that allow us to generate these insights. 

JULIAN BIRKINSHAW:
But if we stay with healthcare for a while, I mean, the biggest problem here is not the clever artificial intelligence applications not quite working. The biggest problem, presumably, is access to data. I mean, there's issues around privacy and fragmented providers of medical systems. And I don't even know this for sure, but I'm guessing that's what's getting in the way here. 

MICHAEL RAYNOR:
Yeah. And perhaps not unreasonably. Folks who are sitting on a trove of data, aren't confused. They know they're sitting on a trove of data. And so you said, “well, everybody just needs to share.” You know what I mean? I'm supposed to give my gold bars to somebody else. Maybe not. So, generating a model that appropriately compensates the relevant parties is a hard problem. I mean, when it comes to AI, they were able to kind of pillage the commons of the internet. And so they got all the necessary inputs, basically for free. And that's not going to happen in health care. 

JULIAN BIRKINSHAW:
So, these so-called large language models like OpenAI's, are as you say, they're just wandering the internet, pulling everything they could possibly get hold of. The hospital data and the health data is not available. It's hidden behind a wall. And so the potential value that we're already starting to see through everyday use of ChatGPT is not yet being realized in the world of health care, because people haven't figured out the right way of securing control, or let's say some sort of royalty or some sort of means of capitalizing on that data.

MICHAEL RAYNOR:
Well, the risk of getting it over my skis, I mean, I think when it comes with AI in general use things we're all kind of familiar with just in every day wandering through the world. Is that they took a Field of Dreams approach. Let's just build the thing and let people figure out how to use it. That's not going to work in health care. What Canary's been forced to do, the reason we've been a ten year overnight success, right, is that we've had to figure out a very specific and effective solution to one particular problem, and that earns you the right to do what's next. Sounds suspiciously like disruption to me. So, you have to find the first rung, on the ladder and then start climbing from there. You can't just kind of throw spaghetti at the wall and see what the world makes of it. 

JULIAN BIRKINSHAW:
And so, do you predict that health care will continue to be a little bit slow in terms of embracing these technologies? 

MICHAEL RAYNOR:
I think the general adoption will be slower. What we have tended to see, more in the US health care ecosystem, than elsewhere, is that where you can find a point solution then then it gets picked up. To the extent and the rate at which you're able to generalize that insight into other therapeutic areas, that's a different problem. 

JULIAN BIRKINSHAW
Because in the US, obviously we can use classic market mechanisms in charging people a lot of money for point solutions. You know, a slightly more socialized approach to health care means that that mechanism isn’t quite there.

MICHAEL RAYNOR:
I think what happens in more socialized health care systems is that there's a lot of piggybacking on the innovation that happens in the US, which is unfortunate because a lot of these solutions, I think, actually do a very good job at taking cost out of the system. And the bad news is that in health care, as is everywhere, your cost is somebody else's revenue. So, if you're figuring out a way to take cost out of the system, someone else is going to fight you like hell. And in a socialized system where the decision making is more centralized and you find something that says, look, if I do this, I can reduce cost, I can reduce burden on the system for systems that are largely under resourced, you’d think they'd be falling all over themselves? But now we run into all manner of other types of managerial and organizational and decision making constraints that make it difficult to change.

JULIAN BIRKINSHAW:
No, indeed. No, it's going to be 1 or 2 steps forward, one step back for a long while I suspect.

There's many more things I'd like to ask you about, but let me just finish with this final question. Staying with AI, but linking now to your role at Ivey. We are grappling with, of course, how the artificial intelligence revolution, the generative AI revolution, is changing both how our students learn and the sort of types of jobs that they're going to get as they re-enter or enter the workforce? What are your current thoughts on what we need to do differently to tackle that?

MICHAEL RAYNOR:
Maybe I'll dodge that for the second and suggest what we need to do that's the same. Because it's a large part. It’s my heritage, so I can't help but be a fan of the of the case method. I think done right, there's nowhere to hide in a case conversation and a case discussion. In fact, we're working on developing some tools to use in the classroom here that will, again, for those who might recall, good old Maxwell Smart and his cone of silence. You put a cone of silence over the case discussion and force people to engage. And it becomes almost genuinely Socratic. And I think doing something that compels students to stand on their own two feet, in the conversation without access to outside tools is critical.

JULIAN BIRKINSHAW:
Well, I'm going to reinforce that point because, and of course, we're preaching to the choir. The case method has always been a legitimate and effective way of learning the surprises so few schools actually have embraced it in the way that we have. But now that basic knowledge is commoditized, available as we know it, you know, as you type of question in, the case method becomes more valuable than ever because the skills that our recruiters, the companies who are hiring our students, say they want are around critical thinking, about being able to study your fields and defend an argument and make your argument and make decisions under uncertainty and as you quite rightly say, the case method is probably the best way within a within a university setting of learning those skills. 

MICHAEL RAYNOR:
People need a more finely tuned BS detector than ever, right? I mean, historically it's been about trying to make sure you don't get bamboozled by the person across from you. Now you need to not get bamboozled by the AI that is purportedly trying to help you.

And that's tough. And so, the hope is my belief is that given the right kind of structure, we can help create those kinds of skills.

JULIAN BIRKINSHAW
I think we're going to stop that. Thank you very much, Michael.

You have been listening to dialog with the dean from Ivey Business School. My thanks to Michael Raynor for such an engaging discussion. And to you, our listeners, for tuning in. If you enjoyed today's episode, don't forget to follow the podcast. Share it with a friend or colleague. And stay tuned for more in-depth talks with Ivey faculty on the ideas shaping business and society. Until next time, goodbye.